In June, former Thai Prime Minister Srettha Thavisin ordered the drafting of a bill to legalize entertainment complexes in the country, a move that could boost tourism spending, increase employment, and revive the economy again. Apart from state lottery or licensed horse betting, gambling is currently illegal in Thailand.

Paetongtarn Shinawatra is now Thailand’s new prime minister, but analysts all agree that the bill will still likely be passed. If that likely outcome becomes a reality, Thailand’s casinos could generate 187 billion Thai baht ($5.5 billion) in revenues, or 1% of the country’s GDP, according to Maybank research. The country could be Macao and Singapore’s largest competitor by the end of the decade. “The Thai government has seen the positive impact on the economy by opening up gambling/casinos as in the case for Singapore, and the power of the gaming dollar in Macau. This move could boost Thailand’s attraction as a tourist destination,” said Tim Tsang, CEO of Companies.Asia, a business consultancy for Corporate Asia.

KTP GLOBAL CONSULTING
KTP Global, a consultancy with emerging dominance in Asia, sees the legalization of gambling in Thailand, and the associated development of the hotel and entertainment industry will offer almost unlimited opportunities for profits and growth that would last at least until the end of this and next decade.

For more information on how we can help, please contact us: consulting@ktpglobal.ca

Musubi, Hawaii's Favorite SPAM Treat

Hormel (NYSE: HRL), the maker of SPAM, America’s favorite luncheon meat, has plans to position it as a premium product in China.  A blend of chopped pork shoulder, ham, salt, sugar, binders and preservatives like potassium chloride and sodium nitrite, SPAM made its market debut in 1937 and immediately became the number one selling luncheon meat in America.   It still remains as one of the top brands in Hormel’s family of grocery products, and accounted for close to 15% of Hormel’s $7.2 billion in sales last year.  More than 122 million cans of SPAM products are sold worldwide each year, 90 million in the U.S. alone.  Hawaii has the highest consumption per capita for SPAM and the most popular way to enjoy it there is the musubi, a sushi like roll with grilled SPAM, seaweed and rice.   SPAM’s overseas revenue has doubled in the past five years as it entered Asian markets such as Japan and South Korea.  Burger King restaurants in Tokyo actually have SPAM burgers on the menu.

Hormel currently has 2 factories in China, but only fresh meat products such as pork sausages and pepperoni are made there for retailers and restaurants including Pizza Hut.

Hormel’s plans to introduce SPAM as a premium product into the Chinese market may face cultural obstacles and strong local competitions.  While pork has long been a big part of the Chinese diet, consumers can choose from a variety of fresh meats such as horse and beef as well as other locally produced luncheon meats. The pressure is on SPAM to differentiate itself; hence the premium strategy, which taps into the growing Chinese fondness for foreign and more expensive brands.  Without a large budget for advertising in China, Hormel’s marketers are focusing on product tasting, in-store posters and online Chinese food recipes using SPAM.  The biggest hurdle for Hormel; however, may be its premium pricing strategy.  At about US$3.20 a can, SPAM is almost 40% more than the price of other local brands such as Great Wall and Ma Ling.

SPAM and Shark Fin Soup anyone?

Copyright © 2011   Companies.Asia …… All Rights Reserved.

HMV Japan Flagship Store at Shibuya Closes In 2010

Japanese convenience store chain Lawson Inc. (TYO: 2651) announced on October 28, 2010 that it will acquire music retailer HMV Japan K.K. from Daiwa Securities SMBC Principal Investments Co. Ltd. for 1.8 billion Yen (US$21.9 million).

The acquisition will allow Lawson to strengthen its stores’ weak music CD and DVD sales. According to Lawson’s own press release, this purchase will enable Lawson to create extensive entertainment merchandise and full range services in all formats, by enhancing the merchandise offerings through its Lawson & HMV stores, Loppi (Lawson’s multi media kiosks) and all its online storefronts, and by utilizing HMV Japan’s highly reliable brand for music and video software, as well as HMV’s leading market share in Japan for these products in both actual store and Internet sales. Industry analysts concur that this strategic move will likely attract more young consumers, the largest segment of customers of convenient stores, by tapping HMV Japan online sales expertise and its more than 4.7 million loyal members.

HMV Japan posted a net profit of 877,000 yen for the fiscal term that ended in April, 2009, but saw a net loss of 4.6 billion yen for the 2010 fiscal year. In an attempt to turn around its business, the company has initiated many cost-cutting measures including the reduction of the number of its stores from 57 to 37 in April of 2010. Its parent company, Daiwa Securities SMBC Principal Investments Co. Ltd. has been looking for a buyer for its struggling subsidiary since the recent slump in the music retail industry.

Culture Convenience Club (TYO: 4756), operator of Japan’s Tsutaya movie and music rental chain, had shown strong interest in buying HMV Japan earlier this year, but negotiations had broken down after both parties failed to agree on a purchase price.

Lawson stores form the 2nd largest convenience (Konbini) store chain (after 7-Eleven) in Japan and currently operate in all 47 prefectures of Japan and in Shanghai, China. It actually originated in the U.S. as Lawson’s Milk Company in 1939. It expanded into a chain of Lawson’s stores throughout the 40s and 50s and was bought by Consolidated Foods in 1959. In 1975, Consolidated signed a deal with Daiei Inc. to establish a series of Lawson stores in Japan. The first Lawson convenience store opened in Osaka in June 1975 and was operated by Daiei Lawson Co. Ltd. which later changed its name to Lawson Japan, Inc.

In 1985, Consolidated Foods changed its name to Sara Lee and sold all its Lawson stores in the U.S. to Dairy Mart which then renamed all the Lawson stores to Dairy Mart stores. From that time on, Lawson stores no longer existed on U.S. soil. In 2002, Dairy Mart was purchased by Quebec based Alimentation Couche-Tard (ACT) which then proceeded to rebrand all the Dairy Mart stores as Circle K stores.

Lawson posted a net profit of 12.56 billion yen for the fiscal year ended February 28, 2010 and has a fiscal forecast of 22 billion yen in profit for 2011.

Copyright © 2010 Companies.Asia …… All Rights Reserved.

In 1977, Coke pulled out of the Indian market because it refused to comply with then government regulations which would essentially force it to form a partnership with a local company and to share its secret Coke formula. In 1988, PepsiCo formed a joint venture with 2 Indian companies and in 1990 introduced its signature cola under the Lehar Pepsi brand. Coke re-entered the Indian market in 1993 when government regulations had changed to allow foreign companies to operate without local partners. Coke’s complete absence from India during a time when India began to embrace Western products was a strategic mistake. Pepsi’s crucial timing and its presence in the Indian market without its main competition had basically made Pepsi into a household word… a word synonymous with the carbonated cola drink category. Sales of PepsiCo’s wide range of products in India, including Frito Lay chips, Tropicana juices, Gatorade drinks and Quaker Oats, totaled $1.5 billion in 2009.

India born Indra Nooyi, PepsiCo Inc. (NYSE: PEP) Chairman and CEO, has stated that she will invest aggressively in emerging markets and will continue to pursue strategic costs-cutting opportunities. Her recent completion of the purchase of PepsiCo’s 2 largest bottlers assured investors of her intentions. PepsiCo’s stock is up 12% since September 2009 and its revenues are projected to be $60 billion for 2010.

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The Galaxy S features a 4-inch, ultra bright super AMOLED high resolution mult-touch screen that can display full high-definition video. The phone is powered by Google’s Android 2.2 operating system and is equipped with a 5 megapixel camera. The phone also supports Flash based web content and games.

Docomo’s President & CEO Ryuji Yamada hopes that the Galaxy S will give the iPhone a serious run for its money and expects that Galaxy sales will easily match the half million units sales by that of Sony Ericsson’s Experia, another smartphone introduced earlier by Docomo in April.

NTT Docomo is a leading mobile operator as well as a developer of cutting-edge mobile technologies in the world. In Japan, Docomo serves over 56 million customers, of which 48 million subscribe to its i-mode services, the world’s most popular mobile email/Internet platform, and 54 million customers subscribe to its FOMA, the world’s original 3G mobile service based on W-CDMA technology.

In November 2008, NTT Docomo acquired a 26% stake in Tata Teleservices which ranked number 6 in the Indian telecom industry. India is the world’s fastest growing cellular market, with a rate of increase of as many as 9 million new customers a month. The newly formed Tata Docomo venture was launched in India in June 2009 and had signed up about 33 million users by the end of June 2010.

NTT Docomo is listed in Tokyo (TYO: 9437), New York (NYSE: DCM), and London (LSE: NDCM). NTT Docomo is a subsidiary of Nippon Telegraph and Telephone Corporation. Docomo announced on October 28, 2010 that its net income rose 22 percent to 167.6 billion yen ($2.1 billion) in the three months ended Sept. 30.

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South Korea’s Shinsegae Group and Lotte Group square off in a battle for supremacy in the retail industry.

Last year, Shinsegae Group opened its latest luxury department store on the home turf of archrival Lotte Group, igniting another round of aggressive competitions for customers. Shinsegae Centum City, the 510,000 square meters (approximately 5.5 million square feet) colossal shopping and entertainment complex has eclipsed even Macy’s New York City Herald Square flagship store to set a new Guinness Record as the largest department store in the world.

Located on a former airport site in the coastal city of Busan, Korea, Shinsegae Centum City is comprised of a 14-story east wing which houses an 8-floor department store, restaurants, a gym and a golf driving range, as well as a 9-story west wing which features an indoor ice skating rink, concert hall, multiplex cinema, an art gallery, and spa facilities. It costs 1.025 trillion won (US$1.09 billion) to build.

Not to be outdone, Lotte Group is already building its own new colossal project, Lotte World, in Busan. It features a Las Vegas Bellagio like water fountain that is supposed to be the largest in the world. A planned skyscraper with a scheduled completion in 2016 would be among the tallest in Asia.

Shinsegae and Lotte have arrived at the top of the retail game through different paths. Lotte’s empire is built on its high-end department stores, a segment where it claims three times the market share of Shinsegae. The foundation of Shinsegae’s business empire is built on its discount E-Mart stores, and this lower end retail market is where Shinsegae claims three times the market share that the discount Lotte Mart attracts. In 2009, for the first time in its operating history, Shinsegae overtook Lotte in total revenue, posting $11.4 billion in sales compared to Lotte’s $10.7 billion.

This fierce domestic battle is continuing overseas. Shinsegae now operates 26 discount stores in china and plans to open another 100 stores there by 2015. Lotte operates 79 discount stores in China as well as many other outlets in Vietnam and Indonesia. This year, Lotte continues its expansion by opening a hotel in Russia, right next to the high-end department store it founded there in 2007.

Anyway, the Clash Of Titans Continues….